Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

YES
x
NO
¨

Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).

YES
x
NO
¨

Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of
“large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.

Large accelerated filer
x

Accelerated filer
¨

Non-accelerated filer
¨
(Do not check if a smaller reporting company)

Smaller Reporting Company
¨

Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act).

YES
¨
NO
x

Common stock, par value $1 per share
63,193,854 shares voting and 8,285,516 shares non-voting outstanding as of October 31, 2015.

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, amortization and accretion

16,788

15,098

Provision for credit losses

3,400

6,700

Stock based compensation

3,343

3,315

Deferred income tax benefit

28,495

28,112

Securities gains, net

(1,877

)

(4,663

)

Gains from sales of government guaranteed loans

(4,281

)

-

Net gains on sale of other assets

(437

)

-

Net gains and write downs on sales of other real estate owned

(368

)

(518

)

Loss on prepayment of borrowings

1,294

4,446

Changes in assets and liabilities:

Other assets and accrued interest receivable

4,232

(12,334

)

Accrued expenses and other liabilities

4,191

(16,813

)

Mortgage loans held for sale

(5,562

)

(9,685

)

Net cash provided by operating activities

102,588

63,031

Investing activities:

Investment securities held to maturity:

Proceeds from maturities and calls of securities held to maturity

57,721

47,567

Purchases of securities held to maturity

-

(173

)

Investment securities available for sale:

Proceeds from sales of securities available for sale

274,519

403,517

Proceeds from maturities and calls of securities available for sale

212,383

176,423

Purchases of securities available for sale

(476,917

)

(552,025

)

Net increase in loans

(324,868

)

(220,061

)

Funds (paid to) collected from FDIC under loss sharing agreements

(1,198

)

2,890

Proceeds from sales of premises and equipment

2,127

2,488

Purchases of premises and equipment

(7,191

)

(3,260

)

Net cash received (paid) for acquisition

35,497

(31,243

)

Proceeds from sale of notes

-

4,561

Proceeds from sale of other real estate

3,184

7,920

Net cash used in investing activities

(224,743

)

(161,396

)

Financing activities:

Net change in deposits

219,454

39,224

Net change in short-term borrowings

(16,238

)

(51,686

)

Repayments of trust preferred securities

(48,521

)

-

Proceeds from FHLB advances

1,495,000

930,000

Repayments of FHLB advances

(1,587,070

)

(720,000

)

Proceeds from issuance of senior debt, net of issuance costs

84,141

-

Proceeds from issuance of common stock for dividend reinvestment and employee benefit plans

204

424

Proceeds from issuance of common stock, net of issuance costs

-

12,206

Retirement of preferred stock

-

(121,613

)

Cash dividends on common stock

(10,506

)

(1,810

)

Cash dividends on preferred stock

(25

)

(1,214

)

Net cash provided by financing activities

136,439

85,531

Net change in cash and cash equivalents

14,284

(12,834

)

Cash and cash equivalents at beginning of period

192,655

228,898

Cash and cash equivalents at end of period

$

206,939

$

216,064

Supplemental disclosures of cash flow information:

Interest paid

$

16,567

$

20,598

Income taxes paid

3,453

2,497

Significant non-cash investing and financing transactions:

Unsettled government guaranteed loan sales

11,020

-

Transfers of loans to foreclosed properties

3,428

8,216

Acquisitions:

Assets acquired

1,736,203

31,243

Liabilities assumed

1,427,358

-

Net assets acquired

308,845

31,243

Common stock issued in acquisitions

214,151

-

Preferred stock issued in acquisitions

9,992

-

See accompanying notes to consolidated financial
statements.

7

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 1 – Accounting Policies

The accounting and financial reporting
policies of United Community Banks, Inc. (“United”) and its subsidiaries conform to accounting principles generally
accepted in the United States of America (“GAAP”) and general banking industry practices. The accompanying interim
consolidated financial statements have not been audited. All material intercompany balances and transactions have been eliminated.
A more detailed description of United’s accounting policies is included in its Annual Report on Form 10-K for the year ended
December 31, 2014.

In management’s opinion, all accounting
adjustments necessary to accurately reflect the financial position and results of operations on the accompanying financial statements
have been made. These adjustments are normal and recurring accruals considered necessary for a fair and accurate presentation.
The results for interim periods are not necessarily indicative of results for the full year or any other interim periods.

Certain 2014 amounts have been reclassified
to conform to the 2015 presentation.

Note 2 –Accounting Standards Updates
and Recently Adopted Standards

In February 2015, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-02,
Consolidation (Topic
810): Amendments to the Consolidation Analysis
, effective for fiscal years beginning after December 15, 2015 and interim periods
within those years with early adoption permitted. The new standard is intended to improve targeted areas of the consolidation guidance
for legal entities such as limited partnerships, limited liability corporations, and securitization structures. The amendments
in the ASU affect the consolidation evaluation for reporting organizations. In addition, the amendments in this ASU simplify and
improve current GAAP by reducing the number of consolidation models. United is currently evaluating the impact of this guidance
on its consolidated financial statements.

In April 2015, the FASB issued ASU No.
2015-03,
Interest – Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of Debt Issuance Costs
.
To simplify presentation of debt issuance costs, the amendments in this update require that debt issuance costs related to a recognized
debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability consistent
with debt discounts. The standard will be effective for the United’s fiscal year beginning after December 15, 2015
and subsequent interim periods. The adoption of ASU 2015-03 is not expected to have a material effect on United’s consolidated
financial statements.

In May 2015, the FASB issued ASU 2015-07,
Disclosures for Investments in Certain Entities that Calculate Net Asset Value Per Share (or its Equivalent)
. ASU 2015-07
removes the requirement to categorize within the fair value hierarchy investments for which fair values are estimated using the
net asset value practical expedient provided by ASC 820. Disclosures about investments in certain entities that calculate net asset
value per share are limited under ASU 2015-07 to those investments for which the entity has elected to estimate the fair value
using the net asset value practical expedient. ASU 2015-07 is effective for fiscal years beginning after December 15, 2015, with
retrospective application to all periods presented. Early application is permitted. The adoption of this update is not expected
to have a material impact on United’s consolidated financial statements.

In June 2015, the FASB issued ASU 2015-10:
Technical Corrections and Improvements
. The amendments in this Update cover a wide range of topics in the Codification including
guidance clarification and reference corrections, simplification and minor improvements. Transition guidance varies based on the
amendments. The amendments that require transition guidance are effective for all entities for fiscal years, and interim periods
within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period.
All other amendments will be effective upon issuance. United retrospectively applied the provisions of ASU 2015-10 during the second
quarter of 2015, with no material impact on United’s financial position or results of operations. The adoption of ASU 2015-10
did affect certain disclosures related to nonrecurring fair value measurements as presented in Note 14.

In July 2015, the FASB issued ASU 2015-12,
Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), and Health and Welfare
Benefit Plans (Topic 965)
. The guidance in the update designates contract value as the only required measure for fully benefit-responsive
investment contracts and simplifies the disclosure of investments by requiring that investments be grouped only by general type
rather than disaggregated in multiple ways. The amendments are effective for fiscal years beginning after December 15, 2015, with
earlier application permitted. The adoption of this update is not expected to have a material impact on United’s consolidated
financial statements.

8

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

In August 2015, the FASB issued ASU 2015-14,
Revenue from Contracts with Customers (Topic 606)
. The guidance in this update delays the effective date of ASU 2014-09,
Revenue from Contracts with Customers (Topic 606):
Summary and Amendments that Create Revenue from Contracts with Customers
(Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40),
which supersedes the revenue
recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the industry topics
of the codification. For public companies, ASU 2014-09 was originally effective for interim and annual periods beginning after
December 15, 2016. ASU 2015-14 delays the effective date for public companies to interim and annual reporting periods beginning
after December 15, 2017. United is currently assessing the impact that this guidance will have on its consolidated financial statements.

In September 2015, the FASB issued ASU
2015-16,
Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments
. The guidance
in this update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement
period in the reporting period in which the adjustment amounts are determined. In addition, the acquirer will record, in the same
period financial statements, the effect on earnings of changes in depreciation, amortization or other income effects, if any, as
a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date.
The update requires disclosure of amounts recorded in current-period earnings that would have been recorded in previous reporting
periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. For public entities, this
update is effective for fiscal years beginning after December 15, 2015 with early application permitted. United applied the provisions
of ASU 2015-16 during the third quarter of 2015, with no material impact on United’s financial position or results of operations.

Note 3 – Acquisitions

Acquisition of Palmetto Bancshares,
Inc.

On September 1, 2015, United completed
the acquisition of Palmetto Bancshares, Inc. (“Palmetto”) and its wholly-owned bank subsidiary The Palmetto Bank. Palmetto
operated 25 branches in South Carolina. In connection with the acquisition, United acquired $1.15 billion of assets and assumed
$1.02 billion of liabilities. Total consideration transferred was $244 million of common equity and cash. The fair value of consideration
paid exceeded the fair value of the identifiable assets and liabilities acquired and resulted in the establishment of goodwill
in the amount of $108 million, which consisted largely of the intangible value of Palmetto’s business and reputation within
the market it serves. None of the goodwill recognized is expected to be deductible for income tax purposes. United will amortize
the related core deposit intangible of $12.9 million using the sum-of-the-years-digits method over 12 years, which represents the
expected useful life of the asset.

The fair value of the 8.7 million common
shares issued as part of the consideration paid for Palmetto was determined on the basis of the closing market price of United’s
common shares on the acquisition date.

9

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The purchased assets and assumed liabilities
were recorded at their acquisition date fair values and are summarized in the table below
(in thousands)
.

As Recorded

Fair Value

As Recorded by

by Palmetto

Adjustments
(1)

United

Assets

Cash and cash equivalents

$

64,906

$

-

$

64,906

Securities

208,407

(624

)

207,783

Loans held for sale

2,356

91

2,447

Loans, net

802,111

(6,087

)

796,024

Premises and equipment, net

21,888

1,251

23,139

Bank owned life insurance

12,133

-

12,133

Accrued interest receivable

3,227

(346

)

2,881

Net deferred tax asset

14,798

(2,327

)

12,471

Core deposit intangible

-

12,900

12,900

Other
assets

18,439

1,080

19,519

Total
assets acquired

$

1,148,265

$

5,938

$

1,154,203

Liabilities

Deposits

$

989,296

$

-

$

989,296

Short-term borrowings

13,537

-

13,537

Other
liabilities

11,994

3,037

15,031

Total
liabilities assumed

1,014,827

3,037

1,017,864

Excess of assets acquired over liabilities assumed

$

133,438

Aggregate fair value adjustments

$

2,901

Consideration transferred

Cash

74,003

Common stock issued (8,700,012 shares)

170,259

Total fair value of consideration transferred

244,262

Goodwill

$

107,923

(1)
Fair values are preliminary and are subject
to refinement for a period not to exceed one year after the closing date of an acquisition as information relative to closing
date fair values becomes available.

United’s operating results for the
nine months ended September 30, 2015 include the operating results of the acquired assets and assumed liabilities for the days
subsequent to the acquisition date of September 1, 2015.

10

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Acquisition of MoneyTree Corporation

On May 1, 2015, United completed the acquisition
of MoneyTree Corporation (“MoneyTree”) and its wholly-owned bank subsidiary, First National Bank (“FNB”).
FNB operated ten branches in east Tennessee. In connection with the acquisition, United acquired $460 million of assets and assumed
$409 million of liabilities and $9.99 million of preferred stock. Total consideration transferred was $54.6 million of common equity
and cash. The fair value of consideration paid exceeded the fair value of the identifiable assets and liabilities acquired and
resulted in the establishment of goodwill in the amount of $14.1 million, which consisted largely of the intangible value of FNB’s
business and reputation within the market it serves. None of the goodwill recognized is expected to be deductible for income tax
purposes. United will amortize the related core deposit intangible of $4.22 million using the sum-of-the-years-digits method over
6.67 years, which represents the expected useful life of the asset. The deposit premium of $917,000 will be amortized using the
effective yield method over 5 years, which represents the weighted average maturity of the underlying deposits.

The fair value of the 2.36 million common
shares issued as part of the consideration paid for MoneyTree was determined on the basis of the closing market price of United’s
common shares on the acquisition date.

Upon completion of the acquisition, each
share of preferred stock issued by MoneyTree as part of the Small Business Lending Fund (“SBLF”) program of the United
States Department of Treasury (9,992 shares in the aggregate with a liquidation preference amount of $1,000 per share) was converted
automatically into one substantially identical share of preferred stock of the Company. See Note 12 for further detail.

The purchased assets and assumed liabilities
were recorded at their acquisition date fair values, and are summarized in the table below
(in thousands)
.

As Recorded

Fair Value

As Recorded by

by MoneyTree

Adjustments
(1)

United

Assets

Cash and cash equivalents

$

55,293

$

-

$

55,293

Securities

127,123

(52

)

127,071

Loans held for sale

1,342

-

1,342

Loans, net

246,816

(2,464

)

244,352

Premises and equipment, net

9,497

2,228

11,725

Bank owned life insurance

11,194

-

11,194

Core deposit intangible

-

4,220

4,220

Other assets

5,462

(716

)

4,746

Total assets acquired

$

456,727

$

3,216

$

459,943

Liabilities

Deposits

$

368,833

$

917

$

369,750

Short-term borrowings

15,000

-

15,000

Federal Home Loan Bank advances

22,000

70

22,070

Other liabilities

864

1,810

2,674

Total liabilities assumed

406,697

2,797

409,494

SBLF preferred stock assumed

9,992

-

9,992

Excess of assets acquired over liabilities and preferred stock assumed

$

40,038

Aggregate fair value adjustments

$

419

Consideration transferred

Cash

10,699

Common stock issued (2,358,503 shares)

43,892

Total fair value of consideration transferred

54,591

Goodwill

$

14,134

(1)
Fair values are preliminary and are subject
to refinement for a period not to exceed one year after the closing date of an acquisition as information relative to closing
date fair values becomes available.

United’s operating results for the
nine months ended September 30, 2015 include the operating results of the acquired assets and assumed liabilities for the days
subsequent to the acquisition date of May 1, 2015.

Pro forma information

The following table discloses the impact
of the merger with Palmetto and MoneyTree since the respective acquisition dates through September 30, 2015. The table also presents
certain pro forma information as if Palmetto and MoneyTree had been acquired on January 1, 2014. These results combine the historical
results of Palmetto and MoneyTree with United’s consolidated statement of income and, while certain adjustments were made
for the estimated impact of certain fair value adjustments and other acquisition-related activity, they are not necessarily indicative
of what would have occurred had the acquisition taken place on January 1, 2014.

Merger-related costs of $8.92 million
from the acquisitions have been excluded from the 2015 pro forma information presented below and included in the 2014 pro forma
information presented below. Furthermore, no adjustments have been made to the pro forma information to eliminate the pre-acquisition
provision for loan losses for the nine months ended September 30, 2015 or 2014 of Palmetto or MoneyTree. No adjustments have been
made to reduce the impact of any OREO write downs recognized by Palmetto or MoneyTree in either the nine months ended September
30, 2015 or 2014. In addition, expenses related to systems conversions and other costs of integration are expected to be recorded
during the next several quarters. United expects to achieve further operating cost savings and other business synergies as a result
of the acquisition which are not reflected in the pro forma amounts below. The actual results and pro forma information were as
follows
(in thousands)
:

On June 26, 2014, United completed the
acquisition of substantially all of the assets of Business Carolina, Inc., a specialty Small Business Administration (“SBA”)
/ United States Department of Agriculture (“USDA”) lender headquartered in Columbia, South Carolina. On the closing
date, United paid $31.3 million in cash for loans having a fair value on the purchase date of $24.8 million, accrued interest of
$83,000, servicing rights with a fair value on the purchase date of $2.13 million, premises and equipment with a fair value on
the purchase date of $2.60 million and goodwill in the amount of $1.51 million representing the premium paid over the fair value
of the separately identifiable assets and liabilities acquired. The gross contractual amount of loans receivable was $28.0 million
as of the acquisition date. United has not identified any material separately identifiable intangible assets resulting from the
acquisition.

The valuation of loans and servicing assets
that were acquired in this transaction included unobservable inputs. Therefore, United considers those valuations to be level 3
in the ASC 820 hierarchy. For the loans, the valuations were derived by estimating the expected cash flows using a combination
of prepayment speed and default estimates. The cash flows are then discounted using the rates implied by observed transactions
in the market place.

12

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 4 – Balance Sheet Offsetting

United enters into reverse repurchase agreements
in order to invest short-term funds. In addition, United enters into repurchase agreements and reverse repurchase agreements with
the same counterparty in transactions commonly referred to as collateral swaps that are subject to master netting agreements under
which the balances are netted in the balance sheet in accordance with ASC 210-20,
Offsetting.

The following table presents a summary
of amounts outstanding under reverse repurchase agreements and derivative financial instruments including those entered into in
connection with the same counterparty under master netting agreements as of September 30, 2015, December 31, 2014 and September
30, 2014
(in thousands)
.

Gross

Amounts
of

Gross

Amounts

Offset
on the

Gross Amounts not Offset

in the Balance Sheet

September 30, 2015

Recognized

Assets

Balance

Sheet

Net Asset

Balance

Financial

Instruments

Collateral

Received

Net Amount

Repurchase agreements / reverse repurchase agreements

$

400,000

$

(400,000

)

$

-

$

-

$

-

$

-

Derivatives

19,906

-

19,906

(831

)

(5,529

)

13,546

Total

$

419,906

$

(400,000

)

$

19,906

$

(831

)

$

(5,529

)

$

13,546

Weighted average interest rate of reverse repurchase agreements

1.25

%

Gross

Amounts of

Gross

Amounts

Offset on the

Net

Gross Amounts not Offset

in the Balance Sheet

Recognized

Liabilities

Balance

Sheet

Liability

Balance

Financial

Instruments

Collateral

Pledged

Net Amount

Repurchase agreements / reverse repurchase agreements

$

400,000

$

(400,000

)

$

-

$

-

$

-

$

-

Derivatives

27,401

-

27,401

(831

)

(28,169

)

-

Total

$

427,401

$

(400,000

)

$

27,401

$

(831

)

$

(28,169

)

$

-

Weighted average interest rate of repurchase agreements

.41

%

Gross

Amounts
of

Gross

Amounts

Offset
on the

Gross Amounts not Offset

in the Balance Sheet

December 31, 2014

Recognized

Assets

Balance

Sheet

Net Asset

Balance

Financial

Instruments

Collateral

Received

Net Amount

Repurchase agreements / reverse repurchase agreements

$

395,000

$

(375,000

)

$

20,000

$

-

$

(20,302

)

$

-

Derivatives

20,599

-

20,599

(869

)

(3,716

)

16,014

Total

$

415,599

$

(375,000

)

$

40,599

$

(869

)

$

(24,018

)

$

16,014

Weighted average interest rate of reverse repurchase agreements

1.16

%

Gross

Amounts of

Gross

Amounts

Offset on the

Net

Gross Amounts not Offset

in the Balance Sheet

Recognized

Liabilities

Balance

Sheet

Liability

Balance

Financial

Instruments

Collateral

Pledged

Net Amount

Repurchase agreements / reverse repurchase agreements

$

375,000

$

(375,000

)

$

-

$

-

$

-

$

-

Derivatives

31,997

-

31,997

(869

)

(32,792

)

-

Total

$

406,997

$

(375,000

)

$

31,997

$

(869

)

$

(32,792

)

$

-

Weighted average interest rate of repurchase agreements

.29

%

13

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Gross

Amounts
of

Gross

Amounts

Offset
on the

Gross Amounts not Offset

in the Balance Sheet

September 30, 2014

Recognized

Assets

Balance

Sheet

Net Asset

Balance

Financial

Instruments

Collateral

Received

Net Amount

Repurchase agreements / reverse repurchase agreements

$

392,000

$

(375,000

)

$

17,000

$

-

$

(17,985

)

$

-

Derivatives

22,221

-

22,221

(2,093

)

(3,427

)

16,701

Total

$

414,221

$

(375,000

)

$

39,221

$

(2,093

)

$

(21,412

)

$

16,701

Weighted average interest rate of reverse repurchase agreements

1.16

%

Gross

Amounts of

Gross

Amounts

Offset on the

Net

Gross Amounts not Offset

in the Balance Sheet

Recognized

Liabilities

Balance

Sheet

Liability

Balance

Financial

Instruments

Collateral

Pledged

Net Amount

Repurchase agreements / reverse repurchase agreements

$

375,000

$

(375,000

)

$

-

$

-

$

-

$

-

Derivatives

36,171

-

36,171

(2,093

)

(38,195

)

-

Total

$

411,171

$

(375,000

)

$

36,171

$

(2,093

)

$

(38,195

)

$

-

Weighted average interest rate of repurchase agreements

.31

%

Note 5 – Securities

The amortized cost basis, gross unrealized
gains and losses and fair value of securities held-to-maturity at September 30, 2015, December 31, 2014 and September 30, 2014
are as follows
(in thousands)
.

Gross

Gross

Amortized

Unrealized

Unrealized

Fair

As of September 30, 2015

Cost

Gains

Losses

Value

State and political subdivisions

$

42,094

$

3,394

$

-

$

45,488

Mortgage-backed securities
(1)

315,455

7,676

523

322,608

Total

357,549

11,070

523

368,096

As of December 31, 2014

State and political subdivisions

$

48,157

$

3,504

$

-

$

51,661

Mortgage-backed securities
(1)

367,110

7,716

1,254

373,572

Total

$

415,267

$

11,220

$

1,254

$

425,233

As of September 30, 2014

State and political subdivisions

$

50,248

$

3,849

$

-

$

54,097

Mortgage-backed securities
(1)

382,170

7,299

3,255

386,214

Total

$

432,418

$

11,148

$

3,255

$

440,311

(1)

All are residential type mortgage-backed securities or
U.S. government agency commercial mortgage backed securities.

14

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table summarizes held-to-maturity
securities in an unrealized loss position as of September 30, 2015, December 31, 2014 and September 30, 2014 (
in thousands)
.

Less than 12 Months

12 Months or More

Total

As of September 30, 2015

Fair Value

Unrealized
Loss

Fair Value

Unrealized
Loss

Fair Value

Unrealized
Loss

Mortgage-backed securities

$

80,174

$

355

$

11,981

$

168

$

92,155

$

523

Total unrealized loss position

$

80,174

$

355

$

11,981

$

168

$

92,155

$

523

As of December 31, 2014

Mortgage-backed securities

$

126,514

$

917

$

17,053

$

337

$

143,567

$

1,254

Total unrealized loss position

$

126,514

$

917

$

17,053

$

337

$

143,567

$

1,254

As of September 30, 2014

Mortgage-backed securities

$

189,223

$

3,147

$

2,798

$

108

$

192,021

$

3,255

Total unrealized loss position

$

189,223

$

3,147

$

2,798

$

108

$

192,021

$

3,255

Management evaluates securities for other-than-temporary
impairment on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is
given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term
prospects of the issuer, among other factors. In analyzing an issuer’s financial condition, management considers whether
the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred,
and industry analysts’ reports. No impairment charges were recognized during the three or nine months ended September 30,
2015 or 2014.

15

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The cost basis, unrealized gains and losses,
and fair value of securities available-for-sale at September 30, 2015, December 31, 2014 and September 30, 2014 are presented below
(in thousands)
.

Gross

Gross

Amortized

Unrealized

Unrealized

Fair

As of September 30, 2015

Cost

Gains

Losses

Value

U.S. Treasuries

$

162,791

$

1,436

$

-

$

164,227

U.S. Government agencies

100,947

858

35

101,770

State and political subdivisions

36,017

413

52

36,378

Mortgage-backed securities
(1)

1,106,835

17,090

4,244

1,119,681

Corporate bonds

207,559

1,904

1,773

207,690

Asset-backed securities

469,736

1,842

3,322

468,256

Other

1,866

-

-

1,866

Total

$

2,085,751

$

23,543

$

9,426

$

2,099,868

As of December 31, 2014

U.S. Treasuries

$

105,540

$

235

$

66

$

105,709

U.S. Government agencies

36,474

-

175

36,299

State
and political subdivisions

19,748

504

19

20,233

Mortgage-backed securities
(1)

988,012

16,273

7,465

996,820

Corporate bonds

165,018

1,686

1,076

165,628

Asset-backed securities

455,626

2,257

1,955

455,928

Other

2,117

-

-

2,117

Total

$

1,772,535

$

20,955

$

10,756

$

1,782,734

As of September 30, 2014

U.S. Treasuries

$

105,385

$

245

$

608

$

105,022

State
and political subdivisions

19,686

666

31

20,321

Mortgage-backed securities
(1)

1,029,881

15,010

9,899

1,034,992

Corporate bonds

165,558

1,427

1,733

165,252

Asset-backed securities

458,569

3,629

154

462,044

Other

2,036

-

-

2,036

Total

$

1,781,115

$

20,977

$

12,425

$

1,789,667

(1)
All are residential type mortgage-backed
securities or U.S. government agency commercial mortgage backed securities.

16

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table summarizes available-for-sale securities
in an unrealized loss position as of September 30, 2015, December 31, 2014 and September 30, 2014
(in thousands)
.

Less than 12 Months

12 Months or More

Total

As of September 30, 2015

Fair Value

Unrealized

Loss

Fair Value

Unrealized

Loss

Fair Value

Unrealized

Loss

U.S. Government agencies

$

10,605

$

35

$

-

$

-

$

10,605

$

35

State and political subdivisions

10,276

52

-

-

10,276

52

Mortgage-backed securities

65,692

288

205,021

3,956

270,713

4,244

Corporate bonds

58,476

1,180

10,407

593

68,883

1,773

Asset-backed securities

265,064

3,024

14,665

298

279,729

3,322

Total unrealized loss position

$

410,113

$

4,579

$

230,093

$

4,847

$

640,206

$

9,426

As of December 31, 2014

U.S. Treasuries

$

34,180

$

66

$

-

$

-

$

34,180

$

66

U.S. Government agencies

36,299

175

-

-

36,299

175

State and political subdivisions

2,481

19

-

-

2,481

19

Mortgage-backed securities

88,741

446

251,977

7,019

340,718

7,465

Corporate bonds

37,891

371

20,275

705

58,166

1,076

Asset-backed securities

221,359

1,592

40,952

363

262,311

1,955

Total unrealized loss position

$

420,951

$

2,669

$

313,204

$

8,087

$

734,155

$

10,756

As of September 30, 2014

U.S. Treasuries

$

104,777

$

608

$

-

$

-

$

104,777

$

608

State and political subdivisions

-

-

3,638

31

3,638

31

Mortgage-backed securities

126,445

844

265,426

9,055

391,871

9,899

Corporate bonds

49,547

414

34,657

1,319

84,204

1,733

Asset-backed securities

57,716

137

9,952

17

67,668

154

Total unrealized loss position

$

338,485

$

2,003

$

313,673

$

10,422

$

652,158

$

12,425

At September 30, 2015, there were 137 available-for-sale
securities and 15 held-to-maturity securities that were in an unrealized loss position. United does not intend to sell nor believes
it will be required to sell securities in an unrealized loss position prior to the recovery of their amortized cost basis. Unrealized
losses at September 30, 2015, December 31, 2014 and September 30, 2014 were primarily attributable to changes in interest rates
and therefore, United does not consider them to be impaired.

Realized gains and losses are derived using
the specific identification method for determining the cost of securities sold. The following table summarizes available-for-sale
securities sales activity for the three and nine months ended September 30, 2015 and 2014
(in thousands)
.

Three Months Ended

September 30,

Nine Months Ended

September 30,

2015

2014

2015

2014

Proceeds from sales

$

137,702

$

13,290

$

274,519

$

403,517

Gross gains on sales

$

328

$

11

$

1,880

$

5,795

Gross losses on sales

(3

)

-

(3

)

(1,132

)

Net gains on sales of securities

$

325

$

11

$

1,877

$

4,663

Income tax expense attributable to sales

$

121

$

4

$

724

$

1,821

Securities with a carrying value of $1.45 billion, $1.51 billion
and $1.38 billion were pledged to secure public deposits and other secured borrowings at September 30, 2015, December 31, 2014
and September 30, 2014, respectively.

17

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The amortized cost and fair value of held-to-maturity
and available-for-sale securities at September 30, 2015, by contractual maturity, are presented in the following table
(in thousands)
.

Available-for-Sale

Held-to-Maturity

Amortized Cost

Fair Value

Amortized Cost

Fair Value

US Treasuries:

1 to 5 years

$

87,168

$

87,925

$

-

$

-

5 to 10 years

75,623

76,302

-

-

162,791

164,227

-

-

US Government agencies:

1 to 5 years

23,027

23,018

-

-

5 to 10 years

77,920

78,752

-

-

100,947

101,770

-

-

State and political subdivisions:

Within 1 year

4,013

4,065

3,510

3,600

1 to 5 years

10,657

10,926

15,509

16,635

5 to 10 years

12,093

12,075

19,245

21,071

More than 10 years

9,254

9,312

3,830

4,182

36,017

36,378

42,094

45,488

Corporate bonds:

1 to 5 years

141,657

142,523

-

-

5 to 10 years

33,451

34,062

-

-

More than 10 years

32,451

31,105

-

-

207,559

207,690

-

-

Asset-backed securities:

1 to 5 years

2,837

2,868

-

-

5 to 10 years

241,369

240,672

-

-

More than 10 years

225,530

224,716

-

-

469,736

468,256

-

-

Other:

More than 10 years

1,866

1,866

-

-

1,866

1,866

-

-

Total securities other than mortgage-backed securities:

Within 1 year

4,013

4,065

3,510

3,600

1 to 5 years

265,346

267,260

15,509

16,635

5 to 10 years

440,456

441,863

19,245

21,071

More than 10 years

269,101

266,999

3,830

4,182

Mortgage-backed securities

1,106,835

1,119,681

315,455

322,608

$

2,085,751

$

2,099,868

$

357,549

$

368,096

Expected maturities may differ from contractual
maturities because issuers and borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

18

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 6 – Loans and Allowance for Credit Losses

Major classifications of loans as of September
30, 2015, December 31, 2014 and September 30, 2014, are summarized as follows
(in thousands)
.

September 30,

December 31,

September 30,

2015

2014

2014

Owner occupied commercial real estate

$

1,479,246

$

1,163,480

$

1,153,933

Income producing commercial real estate

817,833

598,537

604,727

Commercial & industrial

890,233

710,256

649,853

Commercial construction

318,345

196,030

180,794

Total commercial

3,505,657

2,668,303

2,589,307

Residential mortgage

1,061,610

865,789

865,568

Home equity lines of credit

584,934

465,872

458,819

Residential construction

334,084

298,627

307,178

Consumer installment

116,603

104,899

105,345

Indirect auto

420,697

268,629

242,669

Total loans

6,023,585

4,672,119

4,568,886

Less allowance for loan losses

(69,062

)

(71,619

)

(71,928

)

Loans, net

$

5,954,523

$

4,600,500

$

4,496,958

At September 30, 2015, December 31, 2014
and September 30, 2014, loans totaling $2.51 billion, $2.35 billion and $2.21 billion, respectively, were pledged as collateral
to secure FHLB advances and other contingent funding sources.

At September 30, 2015, the carrying value
and unpaid principal balance of purchased credit impaired (“PCI”) loans accounted for under ASC 310-30 was $52.2 million
and $73.1 million, respectively. The following table presents changes in the value of the accretable yield for acquired loans accounted
for under ASC Topic 310-30 for the three and nine months ended September 30, 2015
(in thousands)
:

Three Months Ended

Nine Months Ended

September 30, 2015

September 30, 2015

Balance at beginning of period

$

946

$

-

Additions due to acquisitions

4,834

5,863

Accretion

(316

)

(399

)

Balance at end of period

$

5,464

$

5,464

In addition to the accretable yield on
loans accounted for under ASC Topic 310-30, the fair value adjustments on purchased loans outside the scope of ASC Topic 310-30
are also accreted to interest income over the life of the loans. At September 30, 2015, the remaining accretable fair value mark
on loans acquired through a business combination and not accounted for under ASC Topic 310-30 was $7.71 million. In addition, indirect
auto loans purchased at a premium outside of a business combination have a remaining premium of $11.0 million.

The allowance for loan losses represents
management’s estimate of probable incurred losses in the loan portfolio as of the end of the period. The allowance for unfunded
commitments is included in other liabilities in the consolidated balance sheet. Combined, the allowance for loan losses and allowance
for unfunded commitments are referred to as the allowance for credit losses.

19

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents the balance
and activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2015 and
2014
(in thousands)
.

2015

2014

Three Months Ended September 30,

Beginning

Balance

Charge-

Offs

Recoveries

Provision

Ending

Balance

Beginning

Balance

Charge-

Offs

Recoveries

Allocation

of

Unallocated

Provision

Ending

Balance

Owner occupied commercial real estate

$

16,339

$

(463

)

$

228

$

(495

)

$

15,609

$

17,804

$

(832

)

$

86

$

-

$

(1,758

)

$

15,300

Income producing commercial real estate

8,200

(126

)

231

(532

)

7,773

11,761

(598

)

494

-

(866

)

10,791

Commercial & industrial

4,728

(508

)

319

1,041

5,580

3,885

(30

)

372

-

(1,009

)

3,218

Commercial construction

4,895

(80

)

21

1,659

6,495

4,067

(104

)

1

-

1,686

5,650

Residential mortgage

19,052

(848

)

415

(1,880

)

16,739

16,763

(1,357

)

240

-

1,940

17,586

Home equity lines of credit

5,479

(413

)

120

1,119

6,305

6,338

(405

)

50

-

(1,144

)

4,839

Residential construction

9,337

(50

)

174

(1,078

)

8,383

11,208

(753

)

41

-

2,358

12,854

Consumer installment

688

(496

)

221

352

765

599

(449

)

256

-

333

739

Indirect auto

1,411

(175

)

13

164

1,413

823

(178

)

11

-

295

951

Total allowance for loan losses

70,129

(3,159

)

1,742

350

69,062

73,248

(4,706

)

1,551

-

1,835

71,928

Allowance for unfunded commitments

2,580

-

-

350

2,930

2,165

-

-

-

165

2,330

Total allowance for credit losses

$

72,709

$

(3,159

)

$

1,742

$

700

$

71,992

$

75,413

$

(4,706

)

$

1,551

$

-

$

2,000

$

74,258

Nine Months Ended September 30,

Beginning

Balance

Charge-

Offs

Recoveries

Provision

Ending

Balance

Beginning

Balance

Charge-

Offs

Recoveries

Allocation

of

Unallocated

Provision

Ending

Balance

Owner occupied commercial real estate

$

16,041

$

(1,194

)

$

317

$

445

$

15,609

$

17,164

$

(2,116

)

$

2,929

$

1,278

$

(3,955

)

$

15,300

Income producing commercial real estate

10,296

(448

)

588

(2,663

)

7,773

7,174

(1,435

)

691

688

3,673

10,791

Commercial & industrial

3,255

(1,139

)

1,236

2,228

5,580

6,527

(2,005

)

1,263

318

(2,885

)

3,218

Commercial construction

4,747

(249

)

72

1,925

6,495

3,669

(236

)

1

388

1,828

5,650

Residential mortgage

20,311

(2,535

)

899

(1,936

)

16,739

15,446

(5,738

)

597

1,452

5,829

17,586

Home equity lines of credit

4,574

(834

)

160

2,405

6,305

5,528

(2,032

)

218

391

734

4,839

Residential construction

10,603

(1,689

)

645

(1,176

)

8,383

12,532

(3,004

)

410

1,728

1,188

12,854

Consumer installment

731

(1,171

)

784

421

765

1,353

(1,580

)

974

-

(8

)

739

Indirect auto

1,061

(433

)

34

751

1,413

1,126

(344

)

38

-

131

951

Unallocated

-

-

-

-

-

6,243

-

-

(6,243

)

-

-

Total allowance for loan losses

71,619

(9,692

)

4,735

2,400

69,062

76,762

(18,490

)

7,121

-

6,535

71,928

Allowance for unfunded commitments

1,930

-

-

1,000

2,930

2,165

-

-

-

165

2,330

Total allowance for credit losses

$

73,549

$

(9,692

)

$

4,735

$

3,400

$

71,992

$

78,927

$

(18,490

)

$

7,121

$

-

$

6,700

$

74,258

In the first quarter of 2014, United modified
its allowance for loan losses methodology to incorporate a loss emergence period. The increase in precision resulting from the
use of the loss emergence period led to the full allocation of the portion of the allowance that had previously been unallocated.

The following table represents the recorded
investment in loans by portfolio segment and the balance of the allowance for loan losses assigned to each segment based on the
method of evaluating the loans for impairment as of September 30, 2015, December 31, 2014 and September 30, 2014
(in thousands)
.

September 30, 2015

December 31, 2014

September 30, 2014

Allowance for Loan Losses

Individually

evaluated for

impairment

Collectively

evaluated for

impairment

Purchased

with

deteriorated

credit quality

Ending

Balance

Individually

evaluated for

impairment

Collectively

evaluated for

impairment

Ending

Balance

Individually

evaluated for

impairment

Collectively

evaluated for

impairment

Ending

Balance

Owner occupied commercial real estate

$

1,506

$

14,103

$

-

$

15,609

$

2,737

$

13,304

$

16,041

$

2,125

$

13,175

$

15,300

Income producing commercial real estate

625

7,148

-

7,773

1,917

8,379

10,296

2,380

8,411

10,791

Commercial & industrial

129

5,451

-

5,580

15

3,240

3,255

26

3,192

3,218

Commercial construction

482

6,013

-

6,495

729

4,018

4,747

1,164

4,486

5,650

Residential mortgage

3,205

13,534

-

16,739

3,227

17,084

20,311

3,501

14,085

17,586

Home equity lines of credit

19

6,286

-

6,305

47

4,527

4,574

51

4,788

4,839

Residential construction

207

8,176

-

8,383

1,192

9,411

10,603

1,037

11,817

12,854

Consumer installment

10

755

-

765

18

713

731

23

716

739

Indirect auto

-

1,413

-

1,413

-

1,061

1,061

-

951

951

Total allowance for loan losses

6,183

62,879

-

69,062

9,882

61,737

71,619

10,307

61,621

71,928

Allowance for unfunded commitments

-

2,930

-

2,930

-

1,930

1,930

-

2,330

2,330

Total allowance for credit losses

$

6,183

$

65,809

$

-

$

71,992

$

9,882

$

63,667

$

73,549

$

10,307

$

63,951

$

74,258

Loans Outstanding

Owner occupied commercial real estate

$

38,513

$

1,426,787

$

13,946

$

1,479,246

$

34,654

$

1,128,826

$

1,163,480

$

33,635

$

1,120,298

$

1,153,933

Income producing commercial real estate

20,580

769,093

28,160

817,833

24,484

574,053

598,537

26,120

578,607

604,727

Commercial & industrial

4,564

885,002

667

890,233

3,977

706,279

710,256

4,540

645,313

649,853

Commercial construction

12,413

303,683

2,249

318,345

12,321

183,709

196,030

12,127

168,667

180,794

Residential mortgage

22,446

1,034,893

4,271

1,061,610

18,775

847,014

865,789

18,778

846,790

865,568

Home equity lines of credit

477

582,754

1,703

584,934

478

465,394

465,872

531

458,288

458,819

Residential construction

8,352

324,599

1,133

334,084

11,604

287,023

298,627

13,055

294,123

307,178

Consumer installment

235

116,349

19

116,603

179

104,720

104,899

245

105,100

105,345

Indirect auto

-

420,608

89

420,697

-

268,629

268,629

-

242,669

242,669

Total loans

$

107,580

$

5,863,768

$

52,237

$

6,023,585

$

106,472

$

4,565,647

$

4,672,119

$

109,031

$

4,459,855

$

4,568,886

20

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Excluding loans accounted for under ASC
Topic 310-30, management considers all loans that are on nonaccrual with a balance of $500,000 or greater and all troubled debt
restructurings (“TDRs”) to be impaired. In addition, management reviews all accruing substandard loans greater than
$2 million to determine if the loan is impaired. A loan is considered impaired when, based on current events and circumstances,
it is probable that all amounts due according to the original contractual terms of the loan will not be collected. All TDRs are
considered impaired regardless of accrual status. Impairment is measured based on the present value of expected future cash flows,
discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral
if the loan is collateral dependent. For TDRs less than $500,000, impairment is estimated based on the average impairment of TDRs
greater than $500,000 by loan category. For loan types that do not have TDRs greater than $500,000, the average impairment for
all TDR loans is used to quantify the amount of required specific reserve. A specific reserve is established for impaired loans
for the amount of calculated impairment. Interest payments received on impaired nonaccrual loans are applied as a reduction of
the outstanding principal balance. For impaired loans not on nonaccrual status, interest is accrued according to the terms of the
loan agreement. Loans are evaluated for impairment quarterly and specific reserves are established in the allowance for loan losses
for any measured impairment.

Each quarter, United’s management
prepares an analysis of the allowance for credit losses to determine the appropriate balance that measures and quantifies the amount
of probable incurred losses in the loan portfolio and unfunded loan commitments. The allowance is comprised of specific reserves
on individually impaired loans, which are determined as described above, and general reserves which are determined based on historical
loss experience as adjusted for current trends and economic conditions multiplied by a loss emergence period factor. Management
uses eight quarters of historical loss experience to determine the loss factors to be used in the reserve calculation for loans
evaluated in the aggregate. Eight quarters has been determined to be an appropriate time period as it is recent enough to be relevant
to current conditions and covers a length of time sufficient to minimize distortions caused by nonrecurring and unusual activity
that might otherwise influence a shorter time period. In previous years, the loss rates were weighted toward more recent quarters
by multiplying each quarter’s annualized historical net charge-off rate by 1 through 8, with 8 representing the most recent
quarter and 1 representing the oldest quarter. Management adopted this method of weighting quarterly loss rates to capture the
rapidly deteriorating credit conditions in its loss factors during the financial crisis. In the first quarter of 2014, in light
of stabilizing credit conditions, management concluded that it was appropriate to apply a more level weighting to capture the full
range and impacts of credit losses experienced during the most recent economic and credit cycle. For the four quarters of 2014,
management applied a weighting factor of 1.75 to the most recent four quarters and a weighting of 1.00 for the four oldest quarters.
Beginning with the first quarter of 2015, management began applying equal weight to all eight quarters to capture the full range
of the loss cycle. Management believes the current weightings are more appropriate to measure the probable losses incurred within
the loan portfolio.

Also, beginning in the first quarter of
2014, management updated its method for measuring the loss emergence period in the calculation of the allowance for credit losses.
The rapidly deteriorating credit conditions during the peak of the credit cycle shortened the length of time between management’s
estimation of the incurrence of a loss and its recognition as a charge-off. In most cases, the loss emergence period was within
a twelve month period which made the use of annualized loss factors appropriate for measuring the amount of incurred yet unconfirmed
credit losses within the loan portfolio. As United has moved out beyond the peak of the financial crisis, management has observed
that the loss emergence period has extended. Management calculates the loss emergence period for each pool of loans based on the
average length of time between the date a loan first exceeds 30 days past due and the date the loan is charged off.

The updates to the weightings to the eight
quarters of loss history and the update to our estimation of the loss emergence period did not have a material effect on the total
allowance for loan losses or the provision for loan losses, however, the revised loss emergence period resulted in the full allocation
of the previously unallocated portion of the allowance for loan losses.

On junior lien home equity loans, management
has limited ability to monitor the delinquency status of the first lien unless the first lien is also held by United. As a result,
management applies the weighted average historical loss factor for this category and appropriately adjusts it to reflect the increased
risk of loss from these credits.

Management carefully reviews the resulting
loss factors for each category of the loan portfolio and evaluates whether qualitative adjustments are necessary to take into consideration
recent credit trends such as increases or decreases in past due, nonaccrual, criticized and classified loans, and other macro environmental
factors such as changes in unemployment rates, lease vacancy rates and trends in property values and absorption rates.

Management believes that its method of
determining the balance of the allowance for credit losses provides a reasonable and reliable basis for measuring and reporting
losses that are incurred in the loan portfolio as of the reporting date.

When a loan officer determines that a loan
is uncollectible, he or she is responsible for recommending that the loan be placed on nonaccrual and charged off. Full or partial
charge-offs may also be recommended by the Collections Department, the Special Assets Department, the Loss Mitigation Department
and the Foreclosure/OREO Department. Nonaccrual real estate loans that are collateral dependent are generally charged down to 80%
of the appraised value of the underlying collateral at the time they are placed on nonaccrual status.

Generally, closed-end retail loans (installment
and residential mortgage loans) past due 90 cumulative days are written down to their collateral value less estimated selling costs
unless the loan is well secured and in process of collection (within the next 90 days). Open-end (revolving) unsecured retail loans
which are past due 90 cumulative days from their contractual due date are generally charged-off.

The following table presents loans individually
evaluated for impairment by class of loans as of September 30, 2015, December 31, 2014 and September 30, 2014
(in thousands)
.

September 30, 2015

December 31, 2014

September 30, 2014

Unpaid
Principal
Balance

Recorded
Investment

Allowance
for Loan
Losses
Allocated

Unpaid
Principal
Balance

Recorded
Investment

Allowance
for Loan
Losses
Allocated

Unpaid
Principal
Balance

Recorded
Investment

Allowance
for Loan
Losses
Allocated

With no related allowance recorded:

Owner occupied commercial real estate

$

14,274

$

13,949

$

-

$

12,025

$

11,325

$

-

$

11,370

$

10,370

$

-

Income producing commercial real estate

10,746

10,603

-

8,311

8,311

-

9,872

9,872

-

Commercial & industrial

1,721

1,624

-

1,679

1,042

-

2,178

1,560

-

Commercial construction

-

-

-

-

-

-

-

-

-

Total commercial

26,741

26,176

-

22,015

20,678

-

23,420

21,802

-

Residential mortgage

1,943

1,220

-

2,569

1,472

-

1,319

954

-

Home equity lines of credit

-

-

-

-

-

-

-

-

-

Residential construction

3,255

3,255

-

4,338

3,338

-

5,460

4,172

-

Consumer installment

-

-

-

-

-

-

-

-

-

Indirect auto

-

-

-

-

-

-

-

-

-

Total with no related allowance recorded

31,939

30,651

-

28,922

25,488

-

30,199

26,928

-

With an allowance recorded:

Owner occupied commercial real estate

24,755

24,564

1,506

24,728

23,329

2,737

24,828

23,265

2,125

Income producing commercial real estate

10,067

9,977

625

16,352

16,173

1,917

16,797

16,248

2,380

Commercial & industrial

2,940

2,940

129

2,936

2,935

15

2,980

2,980

26

Commercial construction

12,584

12,413

482

12,401

12,321

729

12,281

12,127

1,164

Total commercial

50,346

49,894

2,742

56,417

54,758

5,398

56,886

54,620

5,695

Residential mortgage

21,738

21,226

3,205

17,732

17,303

3,227

18,657

17,824

3,501

Home equity lines of credit

477

477

19

478

478

47

531

531

51

Residential construction

6,098

5,097

207

8,962

8,266

1,192

9,427

8,883

1,037

Consumer installment

260

235

10

179

179

18

245

245

23

Indirect auto

-

-

-

-

-

-

-

-

-

Total with an allowance recorded

78,919

76,929

6,183

83,768

80,984

9,882

85,746

82,103

10,307

Total

$

110,858

$

107,580

$

6,183

$

112,690

$

106,472

$

9,882

$

115,945

$

109,031

$

10,307

Excluding loans accounted for under ASC
Topic 310-30, there were no loans more than 90 days past due and still accruing interest at September 30, 2015, December 31, 2014
or September 30, 2014. Nonaccrual loans include both homogeneous loans that are collectively evaluated for impairment and individually
evaluated impaired loans. United’s policy is to place loans on nonaccrual status when, in the opinion of management, the
principal and interest on a loan is not likely to be repaid in accordance with the loan terms or when the loan becomes 90 days
past due and is not well secured and in the process of collection. When a loan is classified on nonaccrual status, interest previously
accrued but not collected is reversed against current interest revenue. Principal and interest payments received on a nonaccrual
loan are applied to reduce outstanding principal.

Loans accounted for under ASC Topic 310-30
are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement
remains unpaid after the due date of the scheduled payment. However, these loans are considered as performing, even though they
may be contractually past due, as any non-payment of contractual principal or interest is considered in the periodic re-estimation
of expected cash flows and is included in the resulting recognition of current period covered loan loss provision or future period
yield adjustments. Loans accounted for under ASC Topic 310-30 were not classified as nonaccrual at September 30, 2015 as the carrying
value of the respective loan or pool of loans cash flows were considered estimable and probable of collection. Therefore, interest
income, through accretion of the difference between the carrying value of the loans and the expected cash flows, is being recognized
on all acquired loans being accounted for under ASC Topic 310-30.

The gross additional interest revenue that
would have been earned if the loans classified as nonaccrual had performed in accordance with the original terms was approximately
$262,000 and $705,000 for the three months ended September 30, 2015 and 2014, respectively and $686,000 and $1.37 million for the
nine months ended September 30, 2015 and 2014, respectively. The gross additional interest revenue that would have been earned
for the three and nine months ended September 30, 2015 and 2014 had performing TDRs performed in accordance with the original terms
is immaterial.

22

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The average balances of impaired loans
and income recognized on impaired loans while they were considered impaired are presented below for the three and nine months ended
September 30, 2015 and 2014
(in thousands)
.

2015

2014

Three Months Ended September 30,

Average
Balance

Interest
Revenue
Recognized
During
Impairment

Cash Basis
Interest
Revenue
Received

Average
Balance

Interest
Revenue
Recognized
During
Impairment

Cash Basis
Interest
Revenue
Received

Owner occupied commercial real estate

$

37,840

$

484

$

523

$

33,715

$

430

$

448

Income producing commercial real estate

20,802

265

281

26,622

325

341

Commercial & industrial

4,637

43

77

4,698

43

85

Commercial construction

12,584

116

116

12,203

119

96

Total commercial

75,863

908

997

77,238

917

970

Residential mortgage

23,176

242

197

19,235

215

215

Home equity lines of credit

477

5

5

538

6

5

Residential construction

8,560

123

123

13,146

130

130

Consumer installment

242

5

4

251

4

5

Indirect auto

-

-

-

-

-

-

Total

$

108,318

$

1,283

$

1,326

$

110,408

$

1,272

$

1,325

Nine Months Ended September 30,

Owner occupied commercial real estate

$

37,605

$

1,413

$

1,491

$

31,460

$

1,191

$

1,219

Income producing commercial real estate

21,427

805

810

26,299

953

991

Commercial & industrial

4,627

126

202

4,314

135

186

Commercial construction

12,340

349

353

12,086

335

338

Total commercial

75,999

2,693

2,856

74,159

2,614

2,734

Residential mortgage

21,955

667

633

20,384

672

670

Home equity lines of credit

504

15

15

531

16

17

Residential construction

9,294

371

381

13,315

452

455

Consumer installment

185

11

10

345

16

19

Indirect auto

-

-

-

-

-

-

Total

$

107,937

$

3,757

$

3,895

$

108,734

$

3,770

$

3,895

The following table presents the recorded
investment in nonaccrual loans by loan class as of September 30, 2015, December 31, 2014 and September 30, 2014
(in thousands)
.

Nonaccrual Loans

September 30,
2015

December 31,
2014

September 30,
2014

Owner occupied commercial real estate

$

5,918

$

4,133

$

2,156

Income producing commercial real estate

1,238

717

1,742

Commercial & industrial

1,068

1,571

1,593

Commercial construction

256

83

148

Total commercial

8,480

6,504

5,639

Residential mortgage

8,847

8,196

8,350

Home equity lines of credit

890

695

720

Residential construction

929

2,006

3,543

Consumer installment

196

134

139

Indirect auto

722

346

354

Total

$

20,064

$

17,881

$

18,745

23

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents the aging
of the recorded investment in past due loans as of September 30, 2015, December 31, 2014 and September 30, 2014 by class of loans
(in thousands)
.

Loans Past Due

Loans Not

As of September 30, 2015

30 - 59 Days

60 - 89 Days

> 90 Days

Total

Past Due

PCI Loans

Total

Owner occupied commercial real estate

$

3,200

$

788

$

3,267

$

7,255

$

1,458,045

$

13,946

$

1,479,246

Income producing commercial real estate

1,814

-

440

2,254

787,419

28,160

817,833

Commercial & industrial

1,040

163

858

2,061

887,505

667

890,233

Commercial construction

285

79

44

408

315,688

2,249

318,345

Total commercial

6,339

1,030

4,609

11,978

3,448,657

45,022

3,505,657

Residential mortgage

4,937

2,501

2,504

9,942

1,047,397

4,271

1,061,610

Home equity lines of credit

1,237

360

196

1,793

581,438

1,703

584,934

Residential construction

663

88

129

880

332,071

1,133

334,084

Consumer installment

549

94

50

693

115,891

19

116,603

Indirect auto

852

468

319

1,639

418,969

89

420,697

Total loans

$

14,577

$

4,541

$

7,807

$

26,925

$

5,944,423

$

52,237

$

6,023,585

As of December 31, 2014

Owner occupied commercial real estate

$

1,444

$

1,929

$

1,141

$

4,514

$

1,158,966

$

-

$

1,163,480

Income producing commercial real estate

2,322

1,172

-

3,494

595,043

-

598,537

Commercial & industrial

302

40

1,425

1,767

708,489

-

710,256

Commercial construction

-

-

66

66

195,964

-

196,030

Total commercial

4,068

3,141

2,632

9,841

2,658,462

-

2,668,303

Residential mortgage

5,234

2,931

3,278

11,443

854,346

-

865,789

Home equity lines of credit

961

303

167

1,431

464,441

-

465,872

Residential construction

1,172

268

1,395

2,835

295,792

-

298,627

Consumer installment

607

136

33

776

104,123

-

104,899

Indirect auto

200

146

141

487

268,142

-

268,629

Total loans

$

12,242

$

6,925

$

7,646

$

26,813

$

4,645,306

$

-

$

4,672,119

As of September 30, 2014

Owner occupied commercial real estate

$

2,769

$

257

$

947

$

3,973

$

1,149,960

$

-

$

1,153,933

Income producing commercial real estate

417

991

226

1,634

603,093

-

604,727

Commercial & industrial

900

103

861

1,864

647,989

-

649,853

Commercial construction

123

182

-

305

180,489

-

180,794

Total commercial

4,209

1,533

2,034

7,776

2,581,531

-

2,589,307

Residential mortgage

6,985

3,136

2,563

12,684

852,884

-

865,568

Home equity lines of credit

1,566

373

375

2,314

456,505

-

458,819

Residential construction

1,262

329

2,803

4,394

302,784

-

307,178

Consumer installment

995

322

191

1,508

103,837

-

105,345

Indirect auto

278

83

200

561

242,108

-

242,669

Total loans

$

15,295

$

5,776

$

8,166

$

29,237

$

4,539,649

$

-

$

4,568,886

As of September 30, 2015, December 31,
2014, and September 30, 2014, $5.66 million, $9.72 million and $9.82 million, respectively, of specific reserves were allocated
to customers whose loan terms have been modified in TDRs. United committed to lend additional amounts totaling up to $189,000,
$51,000 and $38,000 as of September 30, 2015, December 31, 2014 and September 30, 2014, respectively, to customers with outstanding
loans that are classified as TDRs.

The modification of the terms of the TDRs
included one or a combination of the following: a reduction of the stated interest rate of the loan or an extension of the amortization
period that would not otherwise be considered in the current market for new debt with similar risk characteristics; a restructuring
of the borrower’s debt into an “A/B note structure” where the A note would fall within the borrower’s ability
to pay and the remainder would be included in the B note; a mandated bankruptcy restructuring; or interest-only payment terms greater
than 90 days where the borrower is unable to amortize the loan.

24

UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents information
on TDRs including the number of loan contracts restructured and the pre- and post-modification recorded investment as of September
30, 2015, December 31, 2014 and September 30, 2014
(dollars in thousands)
.